China: Blast furnace capacity use dips further to 75.23%

Over November 19-25, the blast furnace (BF) capacity utilization rate among China's 247 steel mills under Mysteel's survey eased for the sixth straight week by another 0.11 percentage point to 75.23%, or still at the lowest since March 2018, as steel mills especially those in North China had been observing the series of production curbing measures.

During the latest survey period, these mills' daily molten iron output decreased for the sixth week too by another 3,100 tonnes/day to 2.02 million t/d in total, and their operational rate declined for the second week by 0.69 percentage points to 69.66% against 86.33% a year ago.

Steelmakers in Tangshan in North China's Hebei, for example, have been reportedly imposed another round of emergency curbing since November 24 due to poor air quality. Such measures tend to affect sintering, coking and blast furnaces, Mysteel Global understands.

Over the latest period, 11 blast furnaces across China had been idled for maintenance, a Shanghai-based market watcher shared, though he added that six blast furnaces had resumed operations on recent domestic steel price recoveries.

By November 25, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment strengthened for the fourth working day to Yuan 4,820/tonne ($755/t) including the 13% VAT, or up Yuan 104/t on the week.

Amid the tepid demand in general and the likelihood of continuing declines in steel output, the 247 steel mills have been consciously lowering their imported iron ore inventories further and by November 25, their total stocks including all forms and the tonnage at their steelworks, port stockyards and on the water, thus, dipped for the third week by 646,000 tonnes to 106 million tonnes or sufficient for 42.15 days, down 0.35 day on week.

Over the same survey period, Mysteel's smaller-scale study on China's 163 steel plants showed that their blast furnace capacity utilization rate reversed from the one-week incline, down 0.68 percentage point on week to 58.01% against the 78.31% around the same time of 2020.

Written by Lindsey Liu, liulingxian@mysteel.com